Mortgage companies could face penalties if they don’t take action to prevent a deluge of foreclosures that threaten to hit the housing market later this year, a U.S. regulator said Thursday.
the The Consumer Financial Protection Bureau’s warning is tied to forbearance relief that has allowed millions of borrowers to delay mortgage payments due to the pandemic. To avoid what the bureau called “avoidable foreclosures” when relief ends, mortgage managers should start contacting affected homeowners now for advice on how to modify their loans.
“There is a tidal wave of distressed homeowners who will need help,” CFPB interim director Dave Uejio said in a statement. declaration. “Military personnel who prioritize troubled families have nothing to fear from our oversight, but we will hold accountable those who harm homeowners and families.”
In another Compliance bulletin released Thursday, the CFPB said companies “that are unable to properly manage loss mitigation can expect the office to take enforcement or supervisory action.”
More than 2 million borrowers in January had postponed or missed payments for at least three months, the office said. Once government-authorized forbearance plans end in September, hundreds of thousands of people may need help getting back on track.